65-74 Tax Codes

Mikeyorks

cadenza82 wrote: »

This now seems right.

It will be if the 10L agrees with the income stated on the p161.

cadenza82

Sorry to drag this thread up again...

Dad is now retiring at the end of September so this is obviously going to affect the tax coding. He's been on 10L now since April as his combined pension, state pension and salary was expected to just exceed the limit for the 40% tax bracket; however, when he retires, he will be quite some way below this. It'll mean that his overall income throughout the year will fall below the 40% tax bracket.

Does anyone know what will happen about the tax coding from the beginning of October? Will they issue a new code which will take into account the tax already paid versus the tax which will need to be paid from then until next April? Or, will the same tax code apply meaning he'll pay more tax but get a refund in April? I'm kind of thinking that ultimately, we're not going to know whether he's paid too much or too little until next April anyway.

So far, they've changed the tax code to 33L, but not sure this has anything to do with the retirement issue!

System

Once he retires and has his P45 get him to contact HMRC with revised estimates of his income (pensions and earnings etc). This should be everything HMRC needs. They wouldn't necessarily review his tax code otherwise. The next time theyd carry out an automatic review is when they calculate next year's code.

No point in paying too much in the meantime.